Debt

[dmk395]

I was just wondering if anyone has any large bank notes outstanding, for which they have bought equipment with, or just used the start up capital to build the business? If yes, do you find it manageable, or a real hassle?

[awm]

A REAL HASSLE.Going to

have to do a premature
cash on an IRA unless something comes up.
The wife is not happy with me right now
ANY BODY GOT A BEDIN THE BARN OR SOMETHING.
Sorry for the poor form.Sometime it o this
sometime it do that.

[eggy]

I would say it depends on the size of the buisness. Some in here operate a walk behind and thats it.....Others are full scale in it for the long run..almost all large players in the game I know have outstanding debt, cash flow can be a struggle from time to time. But I guess I look at the guys with a seperate shop real, trucks etc as the players..in the game...everyone has their own voice on debt do what is right for you..if the money you need to borrow now can bring in revunes that exceed the debt go for it.

[Ssouth]

Not a hassle at all. I borrowed $11,000 last Feb. for start up money. It will be payed off by March of this year. Couldn't have started my business without the money. From that money I purchased an Exmark LZ HP, Echo; trimmer, blower, edger, hedge trimmer, cell phone, 16' tandem axle trailer, and several small hand tools. My advice is that if you can pay off you intial debt in less than two years you are well on you way to a good profit. After that use your profit to buy more efficient equipment and never borrow again. So far this stratagey has worked for me.

[SummitFarmer]

Have to agree with Ssouth!!
I'm looking at "Going Large" if the deal can get done and buy an existing operation. It can be stressful but like south said if you can sacrifice and get that debt paid off quickly, you will reap the rewards. Plus a big load of stress will be Hosta lavista....

[Runner]

I have a $150. dollar a month bank payment that I make for my Lazer EPS. I would love to pay that off this year as I did my Gravely some years ago.

[Pauls Mowing]

Another vote for Ssouth.

Paul

[HOMER]

I have debt, probably will for a while. What are you going to do with all the profit? This is a question that puzzles me because if you don't have any expenses then it will go to taxes..................unless?????????????????

[Twotoros]

Borrowed 20k last year to buy some accts and equipt from another service scaling back. Opted to pay 3/4 back last year because I hate interest .So it was a short year moneywise for me . Big credit on the taxes though .
If fact it's the most I've had in expenses for one season.
I did sell off a few of the accts and equipt.

[Indiana]

I don't know many guys starting out without some form of debt.

I have debt and hate it. Mortgage, business loan, truck payment, etc... I am 31 and in business for 9 years. I wish I knew a way to expand business without borrowing. But I'm at a lost.

Don't want a partner, don't want investors. I like the money (lots of yearly contracts) but don't like the debt.

Oh well.

I gots lots of time to pay it off. I hate interest but right now its my only alternative. I'm in the business for the long haul.

[TJLC]

I'm proud to say that I owe NOTHING on my equip. That's not to say I would never borrow to upgrade. When we picked up and made the move down here I had sold my 4x4 truck and used that money to start my business. I have tried since then to pay cash for all new equipment. I have enough debt, I don't need anymore. I'm not bragging, please understand, I'm just proud of what i have done, like everyone here should be!

[Stonewall]

I built my business with money in hand. Upgraded over the years to 16' tandem axle trailer, 61" Turf Tiger, 36" Scag hydro walk behind, Redmax trimmers, Stihl blowers, Billy Goat blower, 93 F250 diesel. Six years ago, I had a 82 Ford Courier with a Honda 21" mower and a Robin blower and trimmer. It can be done and well worth it. The only thing I owe on is the house. One-man operation and going strong.

[Michael Fronczak]

My bus has been growing at a rate of around 50%, last three years(since going full time). You almost have to take on debt to make growth you need more (and larger equipment), and that costs money. If you don't take on debt, you'll most likely be strapped for cash. Debt is a part of business as much as anything else, intrest on business loans is tax dedectible anyway. I'm getting nervous because this year growth, will(as it looks now exceed 100%), doubling or more my bus. I currently work out of my house, won't be able to, lots of expenses coming up, shop, another truck or two, one or two mowers,ect.
I get married in two weeks, so now I have a wife to worry about, also.

[BCLawncare]

For me, debt is no good it scares me to death,the guy i work for has payments of 14k per month, yes $ 14,000 per month NO way i would want to be in his shoes. It seems nothing good lasts forever so i feel if your makeing good money now pay your debts off fast, things may not be so good down the road. My wife & I have been working our butts off for the last 8 years paying the house off.I plan to start my lawn biz. this spring, i have been planing for 2 years, buying it one piece at a time and im almost there.So far i have a $41,000 investment between my truck,trailer, mowers and 2 cycle equip. and before mowing season it will all be paid for but i still worry and i`ll be the first to say i couldn`t have done it without the help and support of my wife, she`s been great.I hope i dont sound like im bragging i just pray this all work`s out.

[CCLC]

We have tons of debt. Not quite the $14,000 per month as mentioned before but it is substantial. As the business has grown we have had needs for new equipment and vehicles. Debt is about the only way to have enough money to go around for operating expenses. While we do have a great deal of debt we also have more assets. If managed correctly it can be beneficial to a business. Even GM, Ford, and (especially) Chrysler have debts.

[DanG]

Like I tell my wife,

You've got to spend money to make money. : )

Just as long as you make enough to meet all your expenses and to put some in your pocket at the end of the week/month/year.

And figure in replacement/upgrading of equipment that you will need so you can make more money the following year.

Within two years I went from a 36" walk behind up to 72" ZTR's.

Every year my business increases by about 25% so I need to buy bigger and better every few years to keep the profit margin the same or to increase it.

Dan

[zimm4]

Debt should be taken on very cautiously.
When we have A downturn in the economy. Its always better
To be debt free.

[MIDSOUTH]

I'm with you Homer!

[thelawnguy]

Originally posted by zimm4
Debt should be taken on very cautiously.
When we have A downturn in the economy. Its always better
To be debt free.


I agree. When (not if) the economy tanks again it will be us debt free folks with the fistful of dollars who will cash in on the misfortunes of those with 40K loans on their new Duramax, for pennies on the dollar.

I am waiting, maybe not so patiently...let the games begin!

[Mark]

I purchased a new Toro Z Master, and a new Toro 21" 2cycle trim mower,new BP-601 Backpack Blower, and new chevy 350 silverado. I paid cash for the lawn equip and put a healthy down payment on my new truck which ive got paid down to 4600. I will have the truck paid off in April. I purchased all this just last yr.So come April ill be debt free of lawn care equipment. But i still have a nice sized mortgage payment. Last yr was the first time in 5yrs i purchased new equipment. I believe as long as you have the work,going into debt is a must for many business. The only reason i paid cash for my lawn equipment. was because i worked hard and had the extra cash and i didn't want any payemnts. If i would not have had the money,I would gone into debt with no hesitations,youve got to have the equip-to do the work. And if you got the clients you know youll get by if you manage the dollars and put back around 25% to live on. It also helps that my wife works full time,infact shes my insurance health wise. Marks Mowing Service

[GLM]

I started with a 21" Honda and worked my way up to a one ton truck a 36" mower a 48" mower, Gravely brush mower and all of the blowers and trimmers one guy can handle. For me its a part time deal so a large investment up front was not needed. If i need a new peice of equipt. I just save accordingly, I'm really sick of debt. right now I have none,but it is inevitible in any bussiness so less is better for me. Build slowly and surley is my motto. Keep on mowing. Jon G. GLM